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Highlights

July 2012: budgetary deficit of $1.1 billion

There was a budgetary deficit of $1.1 billion in July 2012, compared to a deficit of $1.7 billion in July 2011.

Revenues increased by $0.2 billion, or 0.8 per cent, as increases in excise taxes and duties and in non-resident income tax revenues were largely offset by lower corporate income tax and other revenues. Program expenses decreased by $0.1 billion, or 0.4 per cent, reflecting lower transfer payments, offset in part by higher other program expenses. Public debt charges decreased by $0.4 billion, or 14.2 per cent, largely reflecting a lower Consumer Price Index adjustment on real return bonds.

April to July 2012: budgetary deficit of $3.0 billion

For the first four months of the 2012–13 fiscal year, the budgetary deficit stood at $3.0 billion, compared to a deficit of $5.9 billion reported in the same period of 2011–12.

Revenues were up $3.0 billion, or 3.7 per cent, reflecting higher income tax revenues, excise taxes and duties, and Employment Insurance (EI) premium revenues. Program expenses were up $0.9 billion, or 1.2 per cent, largely reflecting higher transfer payments. Public debt charges were down $0.8 billion.

There was a budgetary deficit of $1.1 billion in July 2012, compared to a deficit of $1.7 billion in July 2011.

Revenues increased by $0.2 billion, or 0.8 per cent, to $20.7 billion.

Personal income tax revenues were up $0.1 billion, or 0.6 per cent.

Corporate income tax revenues were down $0.3 billion, or 11.7 per cent.

Non-resident income tax revenues were up $0.1 billion, or 35.6 per cent.

Excise taxes and duties were up $0.3 billion, or 9.3 per cent. Goods and Services Tax (GST) revenues were up $0.1 billion, or 3.3 per cent. Energy taxes were up $0.1 billion, customs import duties were up $44 million, and other excise taxes and duties were up $0.1 billion.

EI premium revenues were up $0.1 billion, or 7.0 per cent, consistent with the 2012 premium rate of $1.83 per $100 of insurable earnings.

Other revenues, consisting of net profits from enterprise Crown corporations, revenues of consolidated Crown corporations, revenues from sales of goods and services, returns on investments, net foreign exchange revenues and miscellaneous revenues, were down $0.2 billion, or 8.7 per cent.

Program expenses in July 2012 were $19.3 billion, down $0.1 billion, or 0.4 per cent, from July 2011. This decrease reflects lower transfer payments, offset in part by higher other program expenses.

Transfer payments decreased by $0.3 billion, or 2.1 per cent.

Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.3 billion, or 5.7 per cent. Elderly benefits increased by $0.1 billion, or 3.1 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $0.2 billion, or 16.7 per cent, reflecting an increase in regular and special benefits. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $10 million.

Major transfers to other levels of government, consisting of federal transfers in support of health and other social programs (primarily the Canada Health Transfer and the Canada Social Transfer), fiscal transfers (Equalization, transfers to the territories, as well as a number of smaller transfer programs), transfers to provinces on behalf of Canada’s cities and communities, and the Quebec Abatement, decreased by $0.3 billion, or 4.6 per cent, as legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories was more than offset by a decrease in transfer protection payments to provinces.

Other transfer payments were down $0.3 billion, or 14.6 per cent, primarily reflecting lower transfers to First Nations and lower claims expenses at Aboriginal Affairs and Northern Development Canada.

Other program expenses consist of operating expenses of Crown corporations, departments and agencies, including National Defence, and also reflect the ongoing assessment of the Government’s liabilities. These expenses increased by $0.2 billion, or 3.4 per cent, from the previous year.

April to July 2012

For the first four months of the 2012–13 fiscal year, there was a budgetary deficit of $3.0 billion, compared to a deficit of $5.9 billion reported during the same period of 2011–12.

Revenues increased by $3.0 billion, or 3.7 per cent, to $83.3 billion.

Personal income tax revenues were up $1.4 billion, or 3.4 per cent.

Corporate income tax revenues were up $0.4 billion, or 4.0 per cent, reflecting a decrease in receipts of about 4.0 per cent and a decrease of 19.8 per cent in refunds of taxes paid.

Non-resident income tax revenues were up $47 million, or 2.9 per cent.

Excise taxes and duties were up $1.0 billion, or 6.8 per cent, largely reflecting an increase in GST revenues of about $0.6 billion, or 5.8 per cent. Energy taxes, customs import duties and other excise taxes and duties were each up by $0.1 billion.

EI premium revenues were up $0.5 billion, or 7.1 per cent, reflecting growth in insurable earnings and the 2012 premium rate of $1.83 per $100 of insurable earnings.

Other revenues were down $0.2 billion, or 3.0 per cent.

For the April to July 2012 period, program expenses were $76.2 billion, up $0.9 billion, or 1.2 per cent, from the same period the previous year.

Transfer payments increased by $1.0 billion, or 2.0 per cent.

Major transfers to persons were up $0.7 billion, or 3.1 per cent. Elderly benefits increased by $0.8 billion, or 6.1 per cent, reflecting the introduction of the Guaranteed Income Supplement top-up benefit in July 2011, as well as growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments decreased by $0.1 billion, or 1.4 per cent. Children’s benefits were up $15 million, or 0.3 per cent.

Major transfers to other levels of government were up $0.5 billion, or 2.4 per cent, mainly reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, as well as increased transfers to Canada’s cities and communities, offset in part by lower transfer protection payments to provinces.

Other transfer payments were down $0.2 billion, or 1.8 per cent.

Other program expenses decreased by $0.1 billion, or 0.4 per cent.

Public debt charges decreased by $0.8 billion, or 7.5 per cent, reflecting lower Consumer Price Index adjustments on real return bonds and a lower effective interest rate on the stock of interest-bearing debt.

Revenues: April to July 2012

Revenues

$billions

EI premiums

7.502

Other revenues

9.646

Corporate income taxes

9.992

Excise taxes and duties

15.020

Personal income taxes

41.180

Total

83.340

Expenses: April to July 2012

Expenses

$billions

Other transfer payments

9.011

Public debt charges

10.216

Major transfers to other levels of gov't

20.475

Major transfers to persons

23.286

Other program expenses

23.382

Total

86.370

Financial requirement of $12.5 billion for April to July 2012

The budgetary balance is presented on an accrual basis of accounting, recording government revenues and expenses when they are receivable or incurred, regardless of when the cash is received or paid. In contrast, the financial source/requirement measures the difference between cash coming in to the Government and cash going out. This measure is affected not only by changes in the budgetary balance but also by the cash source/requirement resulting from the Government’s investing activities through its acquisition of capital assets and its loans, financial investments and advances, as well as from other activities, including payment of accounts payable and collection of accounts receivable, foreign exchange activities, and the amortization of its tangible capital assets. The difference between the budgetary balance and financial source/requirement is recorded in non-budgetary transactions.

With a budgetary deficit of $3.0 billion and a requirement of $9.5 billion from non-budgetary transactions, there was a financial requirement of $12.5 billion for the April to July 2012 period, compared to a financial requirement of $20.4 billion for the same period the previous year.

Net financing activities up $16.3 billion

The Government financed this financial requirement of $12.5 billion and increased cash balances by $3.8 billion by increasing market debt by $16.3 billion. The increase in market debt was achieved primarily through the issuance of marketable bonds and treasury bills. The level of cash balances varies from month to month based on a number of factors including periodic large debt maturities, which can be quite volatile on a monthly basis. Cash balances at the end of July 2012 stood at $17.1 billion, up $12.8 billion from their level at the end of July 2011.

Note: Totals may not add due to rounding.1 Comparative figures have been restated to reflect the reclassification of the Working Income Tax Benefit and the Refundable Medical Expense Supplement as transfer payments.2 Comparative figures have been restated to reflect the reclassification of the Canadian Film or Video Production Tax Credit, the Film or Video Production Services Tax Credit, the Scientific Research and Experimental Development Investment Tax Credit for Canadian-Controlled Private Corporations and the refundable portion of the Atlantic Investment Tax Credit as transfer payments.3 Comparative figures have been restated to reflect a change in methodology for reporting monthly Goods and Services Tax revenues.

Table 3Expenses

July

April to July

2011
($ millions)

2012
($ millions)

Change
(%)

2011–12
($ millions)

2012–13
($ millions)

Change (%)

Transfer payments

Major transfers to persons

Elderly benefits

3,208

3,308

3.1

12,430

13,193

6.1

Employment Insurance benefits

1,226

1,431

16.7

5,783

5,704

-1.4

Children's benefits

1,120

1,130

0.9

4,374

4,389

0.3

Total

5,554

5,869

5.7

22,587

23,286

3.1

Major transfers to other levels
of government

Support for health and other
social programs

Canada Health Transfer

2,267

2,401

5.9

9,067

9,606

5.9

Canada Social Transfer

959

988

3.0

3,838

3,953

3.0

Total

3,226

3,389

5.1

12,905

13,559

5.1

Fiscal transfers1

2,582

2,190

-15.2

7,488

7,254

-3.1

Canada's cities and communities

0

0

n/a

873

1,035

18.6

Quebec Abatement1

-320

-343

7.2

-1,280

-1,373

7.3

Total

5,488

5,236

-4.6

19,986

20,475

2.4

Other transfer payments

Aboriginal Affairs and
Northern Development

455

131

-71.2

1,952

1,781

-8.8

Agriculture and Agri-Food

68

74

8.8

251

293

16.7

Foreign Affairs and
International Trade

148

158

6.8

767

787

2.6

Health

292

271

-7.2

926

945

2.1

Human Resources and
Skills Development

215

171

-20.5

985

1,118

13.5

Industry

225

179

-20.4

655

616

-6.0

Other2

938

1,016

8.3

3,639

3,471

-4.6

Total

2,341

2,000

-14.6

9,175

9,011

-1.8

Total transfer payments

13,383

13,105

-2.1

51,748

52,772

2.0

Other program expenses

Crown corporations

860

958

11.4

3,387

3,431

1.3

Defence

1,642

1,731

5.4

6,000

6,006

0.1

All other departments
and agencies

3,514

3,533

0.5

14,086

13,945

-1.0

Total other program expenses

6,016

6,222

3.4

23,473

23,382

-0.4

Total program expenses

19,399

19,327

-0.4

75,221

76,154

1.2

Public debt charges

2,783

2,387

-14.2

11,042

10,216

-7.5

Total expenses

22,182

21,714

-2.1

86,263

86,370

0.1

Note: Totals may not add due to rounding.1 Comparative figures have been restated to reflect the reclassification of Alternative Payments for Standing Programs and the Youth Allowance Recovery as the Quebec Abatement.2 Comparative figures have been restated to reflect the reclassification of the Working Income Tax Benefit, the Refundable Medical Expense Supplement, the Canadian Film or Video Production Tax Credit, the Film or Video Production Services Tax Credit, the Scientific Research and Experimental Development Investment Tax Credit for Canadian-Controlled Private Corporations and the refundable portion of the Atlantic Investment Tax Credit as transfer payments.